I wanted to double check my answers to see what you guy gals thought If you steal someone's most likely wrong answer you will be reported Question 1 (1 5 points) The following are savings plans which are used to encourage parents to save for their childrens college education by allowing income to accrue tax free and then taxing only that portion of the income which is attributable to distributions which were not used for qualified education expenses Question 1 options 1) Education Savings Bonds, Education IRAs and outright transfers of property pursuant to the Uniform Gift to Minors Act 2) Education IRAs, Code Sec 529 Plans and outright gifts to minors pursuant to the uniform gift to minors act 3) Code Sec 529 Plans, Education IRAs and Education Savings Bonds 4) Education Savings Bonds, Education IRAs, and Health Savings Accounts Question 2 (1 5 points) Which of the following is a common AMT adjustment Question 2 options 1) The difference between the fair market value and exercise price of an incentive stock option 2) Tax exempt bond interest that is private activity bond interest 3) The deduction for state and local taxes paid 4) Two of the above 5) All of the above Question 3 (1 5 points) The starting point for computing a taxpayers alternative minimum tax liability is the taxpayers regular taxable income To reach the alternative minimum tax base Question 3 options 1) adjustment items are added back to regular income and preference items are subtracted 2) adjustment items are added back or subtracted from regular income and preference items are subtracted 3) adjustment items are added back or subtracted from regular income and preference items are added back 4) adjustment items are subtracted from regular income and preference items are added back 5) None of the above Question 4 (1 5 points) Which result is true about a timing difference for AMT purposes Question 4 options 1) An adjustment for AMT depreciation will result in a subtraction from regular taxable income in the early years an asset is placed in service 2) The taxpayer will have a larger adjusted tax basis in a depreciable asset for regular tax purposes rather than for AMT purposes in the early years the asset is placed in service 3) The taxpayer will likely have a gain on the sale of depreciable property for AMT purposes in early years and a loss for regular tax purposes 4) The taxpayer will likely have a larger adjusted tax basis in a depreciable asset for AMT purposes than for regular tax purposes in the early years the asset is placed in service Question 5 (1 5 points) In general, a taxpayer who is subject to AMT should consider accelerating income recognition or deferring deduction recognition if the following circumstance exists Question 5 options 1) The taxpayer has primarily permanent adjustments, and thus, little or no tax credit available to offset future regular tax liabilities 2) The taxpayer has primarily timing adjustments, and thus, little or no tax credit available to offset future regular tax liabilities 3) The taxpayers marginal regular tax rate is 25 percent 4) The taxpayers alternative minimum taxable income is close to the exemption phase out levels 5) None of the above Question 6 (1 5 points) A consequence of electing to include long term capital gains and qualified dividends in net investment income is Question 6 options 1) Long term capital gains and qualified dividends are taxed at the 15 percent preferential rate for regular tax purposes, but ordinary income rates for AMT purposes 2) Long term capital gains and qualified dividends are taxed at ordinary income rates for both regular and AMT purposes 3) The taxpayer will likely receive an enhanced investment interest expense deduction for both regular and AMT purposes 4) Two of the above 5) None of the above Question 7 (1 5 points) The following describes the Alternative Minimum Tax Credit Question 7 options 1) It may be used to offset the taxpayers regular tax liability 2) It may be used to offset the taxpayers tentative minimum tax liability 3) It allows the taxpayer a credit against his or her regular tax liability for AMT taxes paid as a result of a permanent adjustment or preference item 4) The credit may be carried forward for five years Question 8 (1 5 points) Naomi Grace owns a beach house on Cape Cod She and her family use the home during the summer for one month (28 days) The rest of the summer and into the fall it is rented out for a total of 90 days Naomis Cape Cod property is Question 8 options 1) rented a de minimis amount of time and therefore she includes no income or deductions from the rental in her taxable income calculation 2) used personally for an insignificant amount of time, therefore all her rental income and expenses (allocated between business and personal use) must be reported on Schedule E 3) used personally for a significant amount of time and therefore her rental property is a vacation rental home, and her rental expenses are deductible only to the extent of rental income 4) None of the above Question 9 (1 5 points) The goal of the alternative minimum tax scheme is Question 9 options 1) to find a way to tax low income taxpayers who evade the imposition of taxes through tax preferences such as the Earned Income Credit 2) to find a way to tax individuals with significant economic income who do not pay their fair share of regular income taxes because they take advantage of lawful provisions of the tax code that provide tax incentives and preferences such as accelerated depreciation deductions 3) to find a way to tax individuals with significant economic income who do not pay their fair share of regular taxes because they evade taxes by taking advantage of unlawful tax shelters 4) to find a way to tax individuals with significant economic income who do pay their fair share of regular income taxes because they cannot take advantage of lawful provisions of the tax code that provide tax incentives and preferences, such as accelerated depreciation deductions Question 10 (1 5 points) Betsy Bee has a net short term capital loss of $25,000 in the current tax year She also has a stock she purchased two years ago for $10,000 that is now worth $30,000 Her best tax planning opportunity with respect to her potential long term capital gain is Question 10 options 1) to recognize the long term gain in the current tax year because she can offset it with the short term capital losses 2) to recognize the long term capital gain because next year the stock may be worth less 3) to postpone recognition of the long term capital gain to receive the benefit of 15 percent preferential capital gains rate when the stock is actually sold 4) to postpone recognition of the long term capital gain until the taxpayer has long term capital losses to offset against it

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I wanted to double check my answers to see what you guy/gals thought. If you steal someone's most likely wrong answer you will be reported.

Question 1 (1.5 points) The following are savings plans which are used to encourage parents to save for their childrens college education by allowing income to accrue tax-free and then taxing only that portion of the income which is attributable to distributions which were not used for qualified education expenses:Question 1 options:

1)	Education Savings Bonds, Education IRAs and outright transfers of property pursuant to the Uniform Gift to Minors Act.

2)	Education IRAs, Code Sec. 529 Plans and outright gifts to minors pursuant to the uniform gift to minors act.

3)	Code Sec. 529 Plans, Education IRAs and Education Savings Bonds.

4)	Education Savings Bonds, Education IRAs, and Health Savings Accounts.

Question 2 (1.5 points) Which of the following is a common AMT adjustment:Question 2 options:

1)	The difference between the fair market value and exercise price of an incentive stock option.

2)	Tax-exempt bond interest that is private activity bond interest.

3)	The deduction for state and local taxes paid.

4)	Two of the above.

5)	All of the above.

Question 3 (1.5 points) The starting point for computing a taxpayers alternative minimum tax liability is the taxpayers regular taxable income. To reach the alternative minimum tax base:Question 3 options:

1)	adjustment items are added back to regular income and preference items are subtracted.

2)	adjustment items are added back or subtracted from regular income and preference items are subtracted.

3)	adjustment items are added back or subtracted from regular income and preference items are added back.

4)	adjustment items are subtracted from regular income and preference items are added back.

5)	None of the above.

Question 4 (1.5 points) Which result is true about a timing difference for AMT purposes?Question 4 options:

1)	An adjustment for AMT depreciation will result in a subtraction from regular taxable income in the early years an asset is placed in service.

2)	The taxpayer will have a larger adjusted tax basis in a depreciable asset for regular tax purposes rather than for AMT purposes in the early years the asset is placed in service.

3)	The taxpayer will likely have a gain on the sale of depreciable property for AMT purposes in early years and a loss for regular tax purposes.

4)	The taxpayer will likely have a larger adjusted tax basis in a depreciable asset for AMT purposes than for regular tax purposes in the early years the asset is placed in service.

Question 5 (1.5 points) In general, a taxpayer who is subject to AMT should consider accelerating income recognition or deferring deduction recognition if the following circumstance exists:Question 5 options:

1)	The taxpayer has primarily permanent adjustments, and thus, little or no tax credit available to offset future regular tax liabilities.

2)	The taxpayer has primarily timing adjustments, and thus, little or no tax credit available to offset future regular tax liabilities.

3)	The taxpayers marginal regular tax rate is 25 percent.

4)	The taxpayers alternative minimum taxable income is close to the exemption phase-out levels.

5)	None of the above.

Question 6 (1.5 points)

A consequence of electing to include long-term capital gains and qualified dividends in net investment income is:

Question 6 options:

1)	Long-term capital gains and qualified dividends are taxed at the 15-percent preferential rate for regular tax purposes, but ordinary income rates for AMT purposes.

2)	Long-term capital gains and qualified dividends are taxed at ordinary income rates for both regular and AMT purposes.

3)	The taxpayer will likely receive an enhanced investment interest expense deduction for both regular and AMT purposes.

4)	Two of the above.

5)	None of the above.

Question 7 (1.5 points) The following describes the Alternative Minimum Tax Credit:Question 7 options:

1)	It may be used to offset the taxpayers regular tax liability.

2)	It may be used to offset the taxpayers tentative minimum tax liability.

3)	It allows the taxpayer a credit against his or her regular tax liability for AMT taxes paid as a result of a permanent adjustment or preference item.

4)	The credit may be carried forward for five years.

Question 8 (1.5 points) Naomi Grace owns a beach house on Cape Cod. She and her family use the home during the summer for one month (28 days). The rest of the summer and into the fall it is rented out for a total of 90 days. Naomis Cape Cod property is:Question 8 options:

1)	rented a de minimis amount of time and therefore she includes no income or deductions from the rental in her taxable income calculation.

2)	used personally for an insignificant amount of time, therefore all her rental income and expenses (allocated between business and personal use) must be reported on Schedule E.

3)	used personally for a significant amount of time and therefore her rental property is a vacation rental home, and her rental expenses are deductible only to the extent of rental income.

4)	None of the above.

Question 9 (1.5 points) The goal of the alternative minimum tax scheme is:Question 9 options:

1)	to find a way to tax low-income taxpayers who evade the imposition of taxes through tax preferences such as the Earned Income Credit.

2)	to find a way to tax individuals with significant economic income who do not pay their fair share of regular income taxes because they take advantage of lawful provisions of the tax code that provide tax incentives and preferences such as accelerated depreciation deductions.

3)	to find a way to tax individuals with significant economic income who do not pay their fair share of regular taxes because they evade taxes by taking advantage of unlawful tax shelters.

4)	to find a way to tax individuals with significant economic income who do pay their fair share of regular income taxes because they cannot take advantage of lawful provisions of the tax code that provide tax incentives and preferences, such as accelerated depreciation deductions.

Question 10 (1.5 points) Betsy Bee has a net short term capital loss of $25,000 in the current tax year. She also has a stock she purchased two years ago for $10,000 that is now worth $30,000. Her best tax planning opportunity with respect to her potential long-term capital gain is:Question 10 options:

1)	to recognize the long-term gain in the current tax year because she can offset it with the short-term capital losses.

2)	to recognize the long-term capital gain because next year the stock may be worth less.

3)	to postpone recognition of the long-term capital gain to receive the benefit of 15-percent preferential capital gains rate when the stock is actually sold.